What’s going on here?
Australian shares surged on September 13, 2024, with robust commodity prices pushing the S&P/ASX 200 Index up 0.8% to 8,134.5, nearing an all-time high and aiming for a 1.5% weekly gain.
What does this mean?
Commodity stocks in Australia made substantial gains, especially in the mining and energy sectors. Miners, lifted by rising iron ore prices and strong seasonal demand from China, saw a 2% increase for the day. Giants like BHP Group and Rio Tinto rose by 1% and 1.2%, respectively. The iron ore sub-index surged 4.3% this week, marking its best performance since September 2023. Gold stocks climbed over 4% on expectations of a Federal Reserve rate cut boosting bullion prices. Energy stocks, buoyed by strong oil prices and concerns over Hurricane Francine’s impact on US Gulf of Mexico output, rose 1.9%, with Woodside Energy up 2.6% and Santos increasing by 1.2%.
Why should I care?
For markets: Commodity boom powers Australian market.
The strong performance of Australian commodity stocks is propelling the S&P/ASX 200 Index towards its record high. Investors should keep a close eye on these sectors, as continuing demand from China and potential disruptions in US oil production due to Hurricane Francine could sustain price increases. In contrast, New Zealand’s benchmark S&P/NZX 50 Index fell 0.2% to 12,795.66, showing region-specific market variations.
The bigger picture: Global markets brace for Fed’s next move.
Investors worldwide are eagerly awaiting next week’s US Federal Reserve policy meeting. With recent economic data indicating a slowing US economy, markets are pricing in a 25 basis point rate cut. This potential rate cut is affecting commodities and markets globally, signifying wider economic adjustments. The S&P 500, Dow Jones, and Nasdaq have all posted gains, driven by optimism surrounding Federal Reserve expectations, setting the stage for future market movements.
